Nationwide Foreclosure Activity Decreases Ten Percent in January 2009

- REO Sales Decrease Fifteen Percent - Government Takes Comprehensive Action

Robert L. Labbé - February 23, 2009

Although January marked the beginning of the fourth (4th) year of annual increases in foreclosure activity in the US, it also saw foreclosure activity decrease by ten percent (10%) nationwide from December 2008 according to RealtyTrac's January 2009 U.S. Foreclosure Market ReportT. The report also shows one of every 466 U.S. housing units received a foreclosure filing in January. It's important to note however that a foreclosure filing does not mean the property will make it through to actual foreclosure sale and REO. January REO's, which represent completed foreclosure sales showed an even greater decrease, down fifteen percent (15 %) nationwide from the previous month.

James J. Saccacio, chief executive officer of RealtyTrac attributes the decrease in foreclosure activity to "The extensive efforts on the part of lenders and government agencies . . . particularly the Fannie Mae and Freddie Mac moratorium on all foreclosure sales that was extended through the end of January along with Florida's voluntary forty five (45) day freeze on all new foreclosure actions. . ." Recent far reaching action by the federal government is aimed at further reducing the number of foreclosures and stabilizing the US housing market.

Homeowner Affordability and Stability Plan - The Administration and Treasury announced the Homeowner Affordability and Stability Plan on February 18, 2009, a comprehensive plan designed to help up to 7 to 9 million families restructure or refinance their mortgages to avoid foreclosure. Three key elements of the plan are: (1) providing refinance assistance for 4 to 5 million homeowners to make their mortgages more affordable; (2) a $75 billion Homeowner Stability Initiative designed to reach 3 to 4 million at-risk homeowners; and (3) support for low mortgage rates by strengthening confidence in Fannie Mae and Freddie Mac. See the Executive Summary of the plan here.

Recent Foreclosure Activity by the Numbers (January 2009)

Nevada leads nation's foreclosure rates - Nevada foreclosure activity in January decreased four percent (4%) from the previous month, but the state continued to register the nation's No. 1 foreclosure rate, with 1 of every 76 housing units receiving a foreclosure filing during the month. Foreclosure filings were reported on 14,444 Nevada properties in January, up 137 percent from January 2008.

California posts nation's second highest foreclosure rate - With 1 of every 173 housing units receiving a foreclosure filing during January, California posted the nation's second highest rate followed by Arizona, with 1 of every 182 housing units receiving a foreclosure filing during the month.

Florida posted the nation's fourth highest state foreclosure rate despite a twenty percent (20 %) month-over-month drop in foreclosure activity, with 1 of every 214 housing units receiving a foreclosure filing during the month.

Other states with foreclosure rates ranking among the nation's 10 highest were Oregon, Illinois, Michigan, Georgia, Idaho and Ohio.

California, Florida and Nevada cities post top 10 metro foreclosure rates - California cities accounted for six of the top 10 metro foreclosure rates in January among metro areas with populations of 200,000 or more. Merced, California posted the top metro foreclosure rate, with one in every 59 housing units receiving a foreclosure filing during the month - nearly eight times the national average. Two Florida cities posted foreclosure rates among the top 10 metro foreclosure rates: Cape Coral-Fort Myers at No. 3 with 1 of every 80 housing units and Port St. Lucie at No. 9 with 1 of every 123 receiving a foreclosure filing. Las Vegas-Paradise, Nevada metro area posted the second highest metro foreclosure rate in January with 1 of every 63 housing units while the Reno-Sparks, Nevada metro area posted the 10th highest metro foreclosure rate, with one in every 128 housing units receiving a foreclosure filing.

Other California metro areas with foreclosure rates among the top 10 - Riverside-San Bernardino at No. 4 with 1 of every 81 housing units receiving a foreclosure filing; Modesto at No. 5 with 1 of every 84; Stockton at No. 6 with 1 of every 86 housing units; Vallejo-Fairfield at No. 7 with 1 of every 100 and Bakersfield at No. 8 with 1 of every 120 housing units receiving a foreclosure filing.

Robert L. Labbé is President of MorCap Fund Advisors, LLC. He can be reached at rlabbe@morcapadvisors.com